The arrest of ships is an important measure for applying pressure to recover debts related to work or services provided to yachts. Given the peculiarities of the marine industry and its international nature, sometimes adopting this procedure is the only way to recover the debt. In this article we will deal with the peculiarities of this procedure in view of the entry into force in Spain of the new Law on Maritime Navigation.

Introduction

On 25 September 2014, Law 14/2014, of 24 July, on Maritime Navigation (LMN) came into force. Besides modernizing Spanish maritime law, in case of any doubt, the Law expressly includes private and commercial yachts in this particular area of the law. Until then, the regulations on maritime law in Spain were scattered with the main block being found in the Commercial Code of 1881. With this regulation being found in the Commercial Code, often judges did not apply it in disputes related to private yachts and even commercial ones. The Law clears up any doubt that could arise in relation to the application to yachts, even smaller vessels, of the institution. With Spanish waters being an important destination for yachts of any size, the base port of numerous national and foreign yachts, and the normal place for procuring goods and services for these yachts, the matter is particularly important, as the arrest of vessel is undoubtedly an important measure for applying pressure to enforce and recover debts arise from enjoy them.

Basic rules of the arrest

The LMN provides that the arrest of boats in Spanish will be governed by the International Convention on the Arrest of Ships, drawn up in Geneva in 1999, the provisions of the LNM and the Spanish Law of Civil Procedure (LEC). The jurisdiction for obtaining the measure falls with the competent Spanish courts for hearing the main proceedings or those with territorial jurisdiction where the yacht is located or the port where the yacht is expected to arrive.

To obtain the arrest, a petition signed by the lawyer must be submitted to the competent court. Although this is enough to simply claim a maritime debt, it is advisable to accompany the document with prima facie evidence of the debt, which can either be an invoice or delivery note. The special nature of the arrest of ships is that, contrary to what happens when a precautionary measure by the normal process of the LEC is requested, it is not necessary to prove the existence and appearance of good law (which means that it is not necessary to convince the judge a priori of the reality of the debt) and the risk of late payment (it is not necessary to prove that it will not be recovered if the ship is not retained).

However, to adopt the measure it is necessary for the applicant to deposit in the court a security established by the Law of 15% of the claimed amount to cover possible damages. Having adopted the measure, which necessarily includes immobilizing the yacht, the debtor may release the yacht depositing the claimed amount, which would ensure collection of the debt in case the yacht and the company owner disappear. When many yachts are normally owned by an offshore company, we can say that without obtaining this type of guarantee it is practically impossible to enforce a judgment. Imagine trying to enforce a judgment against a company domiciled on the Marshall Islands or Bahamas.

Debts that enable the arrest

The arrest is right and proper for any maritime claim from the long list of the Geneva Convention of 1999. In our experience, the most common claims in yachting are for good supplied, services rendered, repair and equipping, harbor charges, wages due to the crew, insurance premium, brokerage and agency fee, and disputes on to ownership or possession.

For the arrest to be deemed appropriate, the debtor must also be the owner or bareboat charterer of the yacht at the time of the arrest. In other words, if the boat has been transferred or the lessee has already delivered it to the owner, it is not possible to arrest it. It is therefore very important to act very quickly in case any difficulties in collecting a debt are presumed. The arrest is also deemed appropriate, even in the case of a change of ownership of the ship or delivery of her by the lessee, for privileged maritime liens. Privileged maritime liens are established in the Convention on Maritime Liens and Mortgages, drawn up in Geneva in 1993 and include the crew wages, port fees and reward for salvage of the yacht.

It is also important to note that even in case of bankruptcy; liens arising from privileged maritime liens may be collected through the singular execution of the yacht. In other words, it is not necessary to wait for the whole bankruptcy proceedings. If finally we go to a judicial sale or auction of the yacht, the liens will be enforced by the order in which the arrests were decreed. In other words, the sooner the arrest takes place the greater the possibilities of collecting the debt. The exception is privileged maritime liens which are always collected before the rest, regardless of the executant. Having ordered the arrest of the yacht, the owner or lessee thereof may oppose this if they consider that the alleged debt is not a maritime lien or the debtor is no longer the owner or lessee at the time of the arrest.

Timeframes of the procedure

After the timely filing of the arrest request with the competent court, the arrest warrant is normally processed quickly, the following day in most courts. The arrest involves immobilizing the boat unless the debtor deposits the claimed amount. The debtor may also oppose the arrest if it has been incorrectly filed. After making the arrest, the claimant must present the principal action before the court in which the arrest was requested unless it lacks jurisdiction because the parties have expressly agreed a different court of justice.
Even if they do not agree with the debt, the defendant usually deposits the claimed amount in the court in order to move the boat, so the plaintiff has the security that they will be paid even if the debtor is a company from a faraway country. If it is not deposited, they will always have the option of selling the boat in an auction.

The substantive claim

Under the 1999 Convention, will have the jurisdiction on the merits of the case the Courts of the State in which an arrest has been affected, or security provided to obtain the release of the ship, unless the parties validly agree or have validly agreed to submit the dispute to a Court of another State which accepts jurisdiction, or to arbitration. So on, if the yacht was arrested in Spain an there is not agreement the principal claim shall be submitted to the Spanish Commercial Court that orders the arrest. His process starts with a law suit to be submitted in 20 working days after arrest was done. The debtor can oppose the claim and the Court will resolve in the merits after a public hearing with the parts involved.

Yamandu RODRIGUEZ CAORSI
Lawyer
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